Fundamental Comment

Gold extends drop, yet may find support from the Fed

Gold extends drop, yet may find support from the Fed

Gold prices fell on Wednesday as the dollar remained firm after upbeat U.S. retail sales data, yet losses were limited by hopes that the Federal Reserve would cut interest rates and amid uncertainty over trade between Washington and Beijing.

The precious metal futures dropped 0.24 percent to trade at $1,402.67 an ounce, as of 09:03GMT, while gold spot contracts fell 0.25 percent to $1,402.40 an ounce.

Meanwhile, gold is set for its fourth daily drop out of five as the dollar strengthened on Tuesday after the release of upbeat U.S. retail sales data, which pointed to strong consumer spending.

Retail sales volume rose for the fourth consecutive month in June, recording 0.4 percent, beating forecasts of 0.1 percent increase.

Along with the strong jobs report for June, retail sales improved the overall picture of the world’s biggest economy.

However, markets are still predicting either 25 or 50 basis points cut in the Fed’s key interest rate by the end of this month.

The U.S. dollar stabilized against major currencies near the highest level in a week during Wednesday's trading session, as the index traded at 96.98.

U.S. President Donald Trump said Tuesday that there was still a long way to go to seal an agreement with China. He also threatened to slap tariffs on another $325 billion worth of Chinese goods.  

As for other precious metals, silver slumped 0.45 percent to $15.607 an ounce, although it hovered near a four-month high of $15.69 in the previous session.

Platinum slipped 0.92 percent to $839.10 an ounce, while palladium shed 0.01 percent to $1,516.10 an ounce.

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